The mechanisms by which eukaryotes regulate gene expression are important for understanding many complex biological phenomena including human diseases. Prevention and treatment of such diseases have been and will continue to be improved by basic knowledge of gene regulation, especially because molecular mechanisms of transcriptional initiation are highly conserved in eukaryotic organisms ranging from human to yeast. This proposal will continue to investigate basic issues concerning molecular mechanisms of transcriptional initiation and elongation, polyadenylation, and mRNA stability in yeast, by combining molecular genetics, biochemical, functional genomic, and evolutionary approaches. First, we will address a variety of issues concerning transcriptional initiation and elongation including A) the nature and stability of the preinitiation and post-escape complexes and the role of Mediator in mediating transcriptional activation, B) the bi-directional nature of Pol II transcription and whether non-coding transcripts are functional or a mechanistic consequence of the transcription, C) whether Pol II pausing during elongation depends on DNA sequence of species-specific factors, D) the role of FACT and Spt6 in Pol II transcription and possible nucleosome eviction, and E) whether Pol II elongation factors travel in a large complex throughout the coding regions. Second, in the area of polyadenylation, we will A) address the mechanisms for why polyadenylation is restricted to the 3' UTR and identify factors that are responsible for the wild-type poly(A) pattern, B) identify the factor(s) that determines the different poly(A) site patterns in S. cerevisiae and D. hansenii, C) identify environmental conditions that cause differential polyadenylation and hence regulation of 3' isoforms, and D) identify factors important for regulated polyadenylation. Third, using our new approach to study mRNA decay, particularly of 3' isoforms, we will A) perform RNA structural analysis to provide direct evidence for our hypothesis that secondary structure involving the poly(A) tail and other regions play a key role in mRNA decay, B) address whether RNA secondary structure is determined by sequence or involves species-specific factors, C) identify protein factors mediating the large differences in mRNA stabilities D) perform directed genetic experiments to address how secondary structure affects mRNA stability, E) identify environmental conditions that cause differential mRNA decay and hence regulation of 3' isoforms, and F) identify factors important for regulated mRNA half-lives. Fourth, we will use a novel conceptual and experimental approach to distinguish biological function from biological noise that is based on a comparison of physiological responses, RNA and transcription factor binding profiles, and effects of mutations in yeast species of varying evolutionary distance. We will explicitly measure biological noise by making functional measurements of evolutionary irrelevant or random- sequence DNA in yeast. Overall, the proposal will answer fundamental questions about the interlinked processes of transcription, polyadenylation, and mRNA stability in a mechanistic and evolutionary framework.